French caterer Sodexo sees slowing growth in fiscal 2025 (updated)
24/10/2024 06:54
(Adds context, details on annual results and pricing from
paragraph 4)
Oct 24 (Reuters) - French food caterer Sodexo EXHO.PA
expects its organic growth to slow down to between 5.5% and 6.5%
in the fiscal 2025, it said on Thursday after reporting slightly
higher than expected growth for the financial year through Aug.
31.
The group, which spun off its voucher business Pluxee
PLX.PA in February and is now fully focused on its catering
services, added growth would be driven by new contract wins,
pricing and positive volume growth.
It reported annual organic sales growth of 7.9% for the
fiscal 2024, ahead of analysts' estimate of 7.8% seen in a
company-provided consensus.
During the year, it benefited from contracts related to the
Paris Olympics and the Rugby World Cup, as well as a 4% increase
in prices to mitigate the impact of inflation.
However, it slowed down the pace of price hikes through the
year, while volume growth also eased as the post-COVID recovery
came to an end.
Sodexo said prices were likely to be raised by further 3% in
the current financial year.
It also forecast an underlying operating profit margin
improvement of 30-40 basis points at a constant currency basis,
compared to 4.7% in the prior year.
Its 2024 consolidated revenue was 23.8 billion euros ($25.7
billion), while analysts were expecting 23.9 billion on average,
weighed down by the October 2023 sale of its Homecare activities
and negative currency exchange effects.
($1 = 0.9270 euros)
(Reporting by Dimitri Rhodes in Gdansk; editing by Milla Nissi)
((Dimitri.Rhodes@thomsonreuters.com;))